Careers: The Incredible Shrinking Economic Recovery

When is an economic recovery not an actual recovery? When it benefits the few at the expense of the many.

When is an economic recovery not an actual recovery One good indication is when it benefits the few—or the comparatively few—at the expense of the many. And that’s just what a new study says has happened—in the IT sector.

According to new research from the University of Illinois, Chicago’s Center for Urban Economic Development (CUED)—conducted on behalf of the Washington Alliance of Technology Workers (which is affiliated with the Communications Workers of America)—an economic recovery that’s officially five years strong has produced slightly more than 75,000 new jobs. That’s less than one-fifth of those lost between 2000 and 2003.

For the record, U.S. employers have added 76,300 new IT jobs since April of 2003. Researchers estimate that the IT industry eliminated nearly 403,000 jobs between March of 2001 and March of 2004.

“Technology job growth is weak at best in most major markets across the country,” said WashTech/CWA president Marcus Courtney in a statement. “Tens of thousands of highly-skilled American IT workers remain unemployed or underemployed, while at the same time more and more technology jobs are being shipped out of the country.”

IT unemployment is still high—at least compared to five years ago, when the unemployment rate for information technology workers was at 3.6 percent. Ironically, the CUED study says, more than half of IT job cuts occurred after the official onset of recovery, which is pegged to November of 2001.

“It is far too soon to celebrate this as a strong recovery,” said Nik Theodore, co-author of the study and a professor at the University of Illinois Chicago. “Moreover, the jobs impact of offshoring is considerable.” Researchers claim that the offshoring of jobs and services once performed by American IT pros is a significant factor in the overall weakness of the IT labor market.

More recently, however, another study published by academic researchers—, in this case, accredited online educator American Sentinel University (ASU)—said that the impact of offshoring on unemployment has been—if anything—overstated.

“Once the current economic expansion took hold … we found that the … job losses [from 2000-2002] had little, if anything, to do with jobs moving overseas. Software engineers in particular saw a phenomenal turnaround in job fortunes, swinging from 4 percent decline to 25 percent growth,” said Jeremy Leonard, author of the study and ASU chief economist, in a statement.

The ASU study found that offshoring typically involved tasks that are labor-intensive, easy to codify, or which require little face-to-face contact.

About the Author

Stephen Swoyer is a Nashville, TN-based freelance journalist who writes about technology.